HMM: Microsoft and OpenAI play high-stakes tug-of-war.

Microsoft and OpenAI are engaged in tense negotiations that could unravel one of the most important alliances in AI and fundamentally reorder the industry.

Why it matters: Microsoft has injected billions of dollars in OpenAI and made it a cornerstone of its AI strategy, but the companies have also remained rivals that, in many cases, offer competing AI services.

State of play: The two companies have been in talks for months to amend their partnership, with OpenAI needing approval from Microsoft to move forward with the corporate restructuring it has promised recent investors it would make.

Driving the news: The Wall Street Journal reported Monday that tensions have escalated between the two companies, with OpenAI considering a “nuclear option” of accusing Microsoft of violating antitrust laws.

To date, AI looks an awful lot like the late-’90s dot-com bubble. There’s an awful lot of investing into things people don’t really understand, and zero returns — except for infrastructure providers like Cisco (back then) and Nvidia (today).

Unless something changes, the shakeout ought to be nasty.